Authored by Phil Cohen
Credit Card Processing For Small Businesses: The Chip Era
A few years after their introduction in Europe, chip-cards will finally make their way to the United States on October 1st. From here on out, newly produced credit and debit cards will include chip technology that assigns every in-person transaction an encrypted code, thereby limiting the potential for identity and credit card fraud to transpire. Succinctly put, the new credit card chip makes it harder for thieves and imposters to steal credit card information, produce fake cards, or access credit histories. Sounds great, right? After all, the stronger anti-fraud chip technology is doubtlessly beneficial for consumers everywhere—less capacity for fraud means a lower rate of crime. Some small business owners, though, are not anticipating the change with such optimism, as the EMV chip cards will usher in a wave of new costs.
The Consequences of Not Updating Credit Card Machines for Small Businesses
In order to accommodate innovation, small business owners have to purchase new EMV (European MasterCard and Visa) card systems—and they are not cheap. Businesses who purchase these EMV-compliant systems are likely looking at $350-$1,000 per system. It is a significant investment, but it is one that must be made. A misconception among many small business owners is that they do not think they are a risk of attracting criminals and identity thieves. But consider this: large companies such as Walmart and Target are already equipped with the new chip credit card machines. Where, then, does that leave a thief to turn to? Your small business. Although it is a bit of an investment, if you delay purchasing a new credit card machine for your small business, it leaves you an easy target for fraud and crime.
But it doesn’t stop there. If a small business elects not to switch over to the new system and fraud occurs with a customer’s new EMV chip card, the business is left with the responsibility of picking up the tab, not the bank or vendor. New regulations say that if a business processes a transaction with a system that is not equipped to accommodate the new EMV chip cards and something happens, the small business owner is liable. So—if one of your former customers has their credit information stolen from your store, and the thief purchases, say, 200,000 tennis balls, guess what… your small business has just financed some criminal’s new tennis ball collection.
Moreover, it is worth mentioning that, aside from crisis prevention, transitioning to the new EMV chip system will score you a few points with your customers. When you invest in machinery that will ensure your customers’ credit safety, patrons will see that your business cares about the concerns of its clients and will keep doing business with you. If you decide not to modernize and take their credit safety into consideration, they might just choose to take their business elsewhere.
Don’t Run Unnecessary Small Business Risks
So, you be the judge—is the risk of not updating your credit card machine worth it? Do you really want to run the risk of financing 200,000 tennis balls? Purchase a new credit card machine for your small business that accepts the new chip technology. It is a worthwhile investment.
Are you worried you won’t have the funds to afford the new change? We can help. Accounts receivable factoring is a simple solution that not only will get you the money you need but will help you grow. Factor Finders will get your business where it needs to be with new EMV systems, and leave you debt-free. Contact us today to keep your business safe, and your customers happy.